Apple Will Pay More Than $348 Million in Italian Back Taxes

Tim Cook is right. It is time to rethink the tax codes.

After CEO Tim Cook dismissed the controversy over Apple’s tax bill as “total crap,” the most profitable company in the world just agreed to pay Italy $348 million in back taxes. They got off light.

The agreement comes at the end of an investigation begun in 2013 to determine whether Apple’s Italian revenue was being filtered through its Irish subsidiary, which is subject to a corporate tax rate of 12.5 percent compared to Italy’s 27.5 percent. Apple has long been accused of setting up subsidiaries in low-tax havens to duck taxes — some little more than anonymous offices according to a New York Times investigation — though that’s a fairly common practice even for companies who didn’t come close to declaring roughly $18 billion in quarterly earnings this January. Without this financial game of hide and seek, the company, which has $181.1 billion in offshore accounts, would owe a gargantuan $59 billion in U.S. taxes alone, according to one breakdown from advocacy group Citizens for Tax Justice.

But when pressed by Charlie Rose, Cook got a bit prickly.

“This is a tax code…that was made for the industrial age, not the digital age,” Cook has complained. “It’s backwards, it’s awful for America.”

Italy’s tax code may well be bad for Italy as well. But Apple still owes the country money. This is not a minor point because it illustrates that Cook’s objection to tax codes is not limited to its stupidity. His main objection seems to be that tax codes require companies to pay taxes.